Direct Line ready to sell up on continent

DIRECT Line is gearing up to sell its German and Italian businesses, which could net it a £300million windfall.

PUBLISHED: PUBLISHED: 00:10, Sat, Aug 2, 2014

Direct Line emerged out of the Royal Bank of Scotland in 2012[GETTY]

Britain’s largest motor insurer is in talks with a number of parties about the sale.

This follows a strategic review that will leave Direct Line, which was spun out of Royal Bank of Scotland in 2012, with just a presence in the UK.

Direct Line chief executive Paul Geddes said: “Discussions are taking place with a number of parties but at this stage there is no certainty that a disposal will occur.”

The two international businesses brought in £328million in premiums during the six months ending June 30. Analysts value them at about £300million.

Direct Line shares accelerated 14½p to 299½p as it also posted an 8 per cent rise in pre-tax profits to £225million.

However, operating profits were hit by £80million in bad weather claims at the beginning of the year.

We’ve made it easier to buy our motor products on smartphones and tablets

Direct Line chief executive Paul Geddes

Geddes added: “We delivered good results in the first half of 2014, despite major weather events and competitive markets.”

Geddes claimed that Direct Line, which gets more than 40 per cent of its revenues through motor insurance, had also benefited from tapping into the trend for consumers buying products through modern technology.

He said: “We’ve made it easier to buy our motor products on smartphones and tablets.”

The company, which also owns the Churchill brand, is halfway through a significant cost-cutting exercise, which will result in the axing of 2,000 jobs. It said it is on course to hit its target of £1billion a year in cost savings.